EU-US CCPs agreement unpicked

Author: Edward Price | Published: 24 Feb 2016

Following the EU-US announcement on a common approach to central clearing counterparties (CCPs), US counsel are analysing future implications.

The long-awaited move has unsurprisingly been strongly welcomed. That the two sides would finally agree on the issue can only be a boost for transatlantic regulatory convergence.

"As a practical matter, US-EU agreement on this issue is positive in that it enables CCPs to move forward with a clear path, said Edward Rosen, Partner at Cleary Gottlieb.

But although positive in general, there are also potential downsides. After the initial euphoria, these seem to stem from inconsistency with domestic law.

"The US approach does not seem to me to be consistent with Dodd-Frank and, if adopted universally, would impose potentially significant costs and burdens," said Rosen.

According to Rosen, those costs and burdens would land directly on non-US market utilities and, indirectly on their participants.  "These costs do not seem warranted...